Gov. MLG Proposes 10.5 Billion State Budget For 2024-2025 Fiscal Year With 9.9% Budget Increase; Legislative Finance Committee Expected To Release It’s Own Budget

The 2024 New Mexico legislature begins January 16. The 2024 legislative session will be a 30 short  session where budgetary matters will be the primary focus. On January 4, Governor Michelle Lujan Grisham released her proposed 2024-2025 state budget that begins on July 1.  She is proposing a $10.5 billion budget which is a 9.9% increase from the current fiscal year that ends on June 30.

The Governor  has submitted a record breaking $10.5 billion budget where she  is recommending the state capitalize on “record revenues” with $10.5 billion in recurring funds and $2.1 billion in one-time, nonrecurring cash infusions for the upcoming fiscal year budget.

Major increases in pay raises is being proposed for all state employees with even higher pay increases for law enforcement.  The Governor is proposing a 3% pay raise  for all state employees and teachers. State Police officers would be given a larger pay raise of 14% while corrections, probation and parole officers would get 7% pay raises. More than half a billion would be earmarked for law enforcement recruitment, pay, and equipment and support for other first responders.

The governor wants to put more than $3 billion toward healthcare initiatives to help subsidize patient care and draw more providers to the state. Hundreds of millions would also be allocated for economic development investments, roads and infrastructure, and shoring up the state’s water supply.

Lujan Grisham’s proposed budget includes provisions to keep more than a third of state revenues in reserve, in case of revenue shortfalls in the future. The New Mexico Constitution requires a balanced budget.  However  during the 2008 recession and an oil bust in the early 2010s, reserves proved insufficient to cover the losses.


As usual, public education is  the  biggest area for funding. More than $4 billion would go toward K-12 education to expand early childhood programs, train educators and  boost teacher pay.  A 7% budget increase from last year is being proposed for the Department of Public Education.   $4.5 billion would go to summer and after-school programs, literacy programs and a new Structured Literacy Institute, among other programs.

Spending on public education would increase by $283 million, or 6.8%, to nearly $4.5 billion. One goal is to bolster specialized literacy programs, while founding a state literacy institute. Additional funds would help extend annual instructional time at public schools across the state. Republicans in the legislative minority oppose the push to expand public school calendars.

The Lujan Grisham administration hopes to add 2,000 slots for infant and toddler childcare and expand early preschool by 1,380 slots through increased state spending, while also bolstering aid to children being raised by grandparents.  Legislators have expressed frustration in recent months with the results of sustained spending increases on public education. Statewide, the share of students who can read at their grade level is 38%. Math proficiency is at 24%. The state’s high school graduation rate hovers at 76%, well below the national average of 87%.


As usual, oil and gas revenues still dominates state revenues and is makes  up to almost 40% of the expected $13.05 billion in general fund revenues for the next fiscal year.

Although state revenues are still high,  Department of Finance and Administration Secretary Wayne Propst acknowledged that growth is expected to slow. Propst said this in a statement:

“We’re fully aware that growth is projected to slow in future fiscal years, but the state is in a unique position to continue to make smart investments now, while maintaining historically high reserves. … It’s also important to note that as we improve health outcomes, lift families out of poverty and bolster the state’s economy, costs for programs and services go down.”

The Governor’s proposed budget also addresses clean energy initiatives.  $20 million would be made available as low-interest loans to communities for projects that reduce carbon emissions, and $30 million would head to improving electric vehicle infrastructure in the state. The Governor’s Office is also pursuing incentives for the purchase of electric vehicles or plug-in hybrids to bolster new clean cars requirements adopted by the state.

But Larry Behrens, the communications director for Power the Future, a group that advocates for energy worker interests, wanted more from the “massive” budget recommendation.


A breakdown of what the governor is asking by category for is as follows:

Water & Natural Resources 

  • $500 million capital appropriation from severance tax bonds for the Strategic Water Supply. Lujan Grisham announced the Strategic Water Supply program during a December trip to Dubai. It treats water for use in renewable energy production
  • $250 million general fund transfer to the Land of Enchantment Conservation Fund, which feeds into the Land of Enchantment Legacy Fund
  • $20 million to support low-interest loans to communities to implement projects that reduce carbon emissions

Housing & Homelessness 

  • $250 million for the New Mexico Housing Trust Fund
  • $250 million to the New Mexico Finance Authority Opportunity Enterprise Revolving Fund to increase funding for affordable housing, including developments of low-income multi-family housing, down payment assistance for low and middle-income households, homeowner rehabilitation and weatherization programs, etc.
  • $40 million for homelessness initiatives to coordinate and expand homelessness services statewide


  • $33 million to expand early pre-kindergarten by 1,380 slots
  • $101.2 million increase to the State Equalization Guarantee Distribution for the necessary adjustment to 180 classroom days
  • $58.1 million for structured literacy, including $30 million for a new Structured Literacy Institute
  • $43.5 million for healthy, universal school meals
  • 3% pay increase ($96 million) for all educators

Health Care, Behavioral Health & Child Well-Being 

  • $2.15 billion in recurring general fund for the Health Care Authority, formerly the Human Services Department
  • $100 million for the Rural Healthcare Delivery Fund
  • $87.9 million for Medicaid provider rate increases to 150% for maternal/child health, primary care, and behavioral health
  • $24.7 million to create a new Family Services division at the Children, Youth and Families Department

Public Safety 

  • $35 million for corrections and law enforcement recruitment statewide
  • $5 million for the Governor’s Commission on Organized Crime
  • $35 million for the Firefighter and EMT Recruitment Fund

Economic Development & Infrastructure 

  • $100 million to launch the New Mexico Match Fund, which will leverage federal funding for infrastructure investments, including roads, bridges, water, energy and broadband
  • $25 million for the Local Economic Development Act Program (LEDA)
  • $9.7 million for the Job Training Incentive Program (JTIP)
  • $5 million in total funding for the New Mexico Media Academy
  • $1.5 million special to the Economic Development Department to broaden New Mexico’s international market reach


Governor Lujan Grisham in releasing here 2024-2025 proposed budget said this:

“Because of our historic – but prudent – investments made over the last few years in New Mexico in everything from small businesses to hospitals, childcare to college, free school meals to law enforcement, the future of our state is brighter than ever. … Here’s my promise to New Mexicans today: I will continue to push for programs, services and solutions that work. Here’s my promise to New Mexicans in future years and future generations: We will continue to spend within our means, responsibly and with an eye toward accountability, always, while capitalizing on the fiscal opportunities available.”   

LINKS TO QUOATED NEWS SOURCES ARE HERE:,will%20maintain%20reserves%20at%2034.2%25.


The 30 day New Mexico legislative session begins on January 16  at noon and ends on February 15 at noon.  The Legislative Finance Committee is expected to release its own proposed budget on January 5.  Once the session begins, both budgets will be subject to legislative hearings in both the House and Senate. A final budget will emerge.

One thing is for certain, the governor’s proposed budget is ambitious because of the 9.9% increase she is proposing but the job of promoting her programs during the 2024 legislative session will be made much easier because of the oil boom that has propelled New Mexico’s government revenue to record highs.

The record surplus should allow the Governor to virtually fund all the education programs she wants, invest in capital projects and infrastructure but only if the legislature allows her.

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Pete Dinelli was born and raised in Albuquerque, New Mexico. He is of Italian and Hispanic descent. He is a 1970 graduate of Del Norte High School, a 1974 graduate of Eastern New Mexico University with a Bachelor's Degree in Business Administration and a 1977 graduate of St. Mary's School of Law, San Antonio, Texas. Pete has a 40 year history of community involvement and service as an elected and appointed official and as a practicing attorney in Albuquerque. Pete and his wife Betty Case Dinelli have been married since 1984 and they have two adult sons, Mark, who is an attorney and George, who is an Emergency Medical Technician (EMT). Pete has been a licensed New Mexico attorney since 1978. Pete has over 27 years of municipal and state government service. Pete’s service to Albuquerque has been extensive. He has been an elected Albuquerque City Councilor, serving as Vice President. He has served as a Worker’s Compensation Judge with Statewide jurisdiction. Pete has been a prosecutor for 15 years and has served as a Bernalillo County Chief Deputy District Attorney, as an Assistant Attorney General and Assistant District Attorney and as a Deputy City Attorney. For eight years, Pete was employed with the City of Albuquerque both as a Deputy City Attorney and Chief Public Safety Officer overseeing the city departments of police, fire, 911 emergency call center and the emergency operations center. While with the City of Albuquerque Legal Department, Pete served as Director of the Safe City Strike Force and Interim Director of the 911 Emergency Operations Center. Pete’s community involvement includes being a past President of the Albuquerque Kiwanis Club, past President of the Our Lady of Fatima School Board, and Board of Directors of the Albuquerque Museum Foundation.